Glanbia Implements Adverse Weather Bonus, Price Cuts
Published on Mar 13 2018 10:32 AM
Kilkenny-based dairy company Glanbia will introduce a ‘special support payment’ of 1c/l of milk as a result of the tough spring weather and challenging conditions on farms.
Farmers supplying fixed milk price schemes will also get the support payment, while Glanbia will pay the 20c/l on volumes of milk lost to Storm Emma, where they aren’t covered by insurance, according to the Irish Independent.
The company has also cut milk prices for February by 3c/l compared to January levels and it will pay milk suppliers 32c/l including VAT for Fabruary at 3.6% butterfat and 3.3% protein.
Meanwhile, Global Dairy Trade prices have slipped for the second time in a row, while Glanbia CEO Jim Bergin warned at the recent launch of the renovated Wexford cheese plant that there was an “oversupply situation”.
Low Market Trade
“Today, markets are trading considerably below the milk price, so therefore we will have to address that,” he said. “Farmers should stress test their budgets at 28c/l. There has been a little bit of an improvement at the lower end but the last two GDPs have gone backwards.”
The company’s chairman Henry Corbally said that support payments would be made as it continues to monitor farm and weather developments every month.
He added that a significant number of farmers could avail of the seasonality bonus of 4.25c/l including VAT on February supplies where they have to supply at least 3% of their yearly supply in February and less than 15% in June.
'Low And Slow'
The Irish Creamery Milk Suppliers Association (ICMSA) Dairy Committee’s chairman, Gerald Quain, noted his disappointment that Glanbia had chosen to cut its February milk price by 3c/l and said that its decision to cut by so much stood in sharp contrast to their ‘low and slow’ policy of price increases when the dairy markets were doing well.
Quain also said that the 1c/l adverse weather bonus should be part of the milk price as opposed to being classed as a bonus.
The February payment was the first decent milk cheque for the year for most farmers, he said, adding that Glanbia’s cuts were a sharp blow to farmer confidence as they entered Q2 and peak production months.
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